The fact that the Irish rental market is currently experiencing the highest levels of year-on-year growth it has seen in the last five years, is comforting news to many Irish investors. It is likely that recent EU expansion and the influx of immigrant workers seeking rental accommodation is partly responsible for this. There has been a reported 11.9% increase in income being received by landlords in the twelve months to date. The eight increases in interest rates that were introduced are also responsible to some extent, with many tenants choosing to extend their leases instead of taking out mortgages on properties themselves.
The figure for average rent nationwide is somewhere in the region of €1,382 according to recent figures, having grown by €150 since the same time last year. Yields on rental properties have also experienced growth, and currently stand at an average figure of 4%. This is excellent news for buy-to-let investors as the rental market continues to grow while many lose confidence in the housing market.
The highest yields proportionately are from two bed properties, with mean returns at 3.55%. Unsurprisingly, five beds are coming in with the lowest yields at around 2.71%. It is thought that this is due to landlords demanding higher rents for five bed properties, where many tenants considering paying such high rents feel that taking out their own mortgages would be a wiser decision.
There has also been significant decrease in the supply of rental properties to the market, reportedly in the region of 20%. This could is also driving up rents, as people find it increasingly difficult to secure rental accommodation. As expected, rental prices in Dublin are highest with landlords in many areas including the city centre charging rents in excess of €1,600, having increased their rental prices by 12% on average during the past year. However, rents in Cork and Limerick are growing at a much faster rate with current rental inflation standing at a huge 14%.
Region Property Average rental p.m.(€)
Dublin 2 2 bed 1,751
Dublin 4 2 bed 1,694
West Dublin 2 bed 1,152
Commuter belt 2 bed 887
Cork City 2 bed 1,028
Galway City 2 bed 921